Appeals court overturns ruling that halted Wisconsin campaign probe

MILWAUKEE (Reuters) - A federal appeals court on Wednesday overturned an earlier ruling that had halted an investigation in Wisconsin into possible illegal coordination between Governor Scott Walker's campaign and special interest groups in 2011 and 2012 elections.

A federal judge in May stopped the probe after the Wisconsin Club for Growth, a conservative organization, filed a lawsuit accusing investigators of sidelining it from political activities and violating its rights to free speech, association and equal protection.

The 7th U.S. Circuit Court of Appeals in Chicago said in its ruling that the case should be decided in state court rather than in federal court, and that the defendants, who are the Wisconsin prosecutors, enjoyed immunity when investigating possible wrongdoing.

It is unclear how the ruling will affect the investigation because the judge who is overseeing it quashed subpoenas in January and ordered investigators to return evidence, according to the Wall Street Journal.

Prosecutors "do not show probable cause that the moving parties committed any violations of the campaign finance laws," Judge Gregory Peterson wrote, according to the sealed ruling obtained by the Journal.

Neither Walker, a potential Republican White House hopeful in 2016, nor anyone else has been charged in the investigation, which has been pursued under a Wisconsin law that requires such probes to be conducted in secret.

Walker was elected governor in 2010. In June 2012, he became the first governor in U.S. history to survive a recall election. The investigation was launched two months later and is also looking at recall elections in 2011 involving other candidates.

Walker was forced into a special election after he angered Democrats and labor unions by pushing through the state Legislature a bill stripping public-sector labor unions of much of their power.

In previously released court documents, prosecutors suggested Walker's campaign advisers gained control over both the funding and strategy of independent conservative groups, in what could be a violation of campaign finance laws.

Walker and Democratic challenger Mary Burke are in a statistical dead heat in opinion polls less than two months before the November election.

(Reporting by Brendan O'Brien in Milwaukee; Editing by Fiona Ortiz and Peter Cooney)